Page 15 - LatAmOil Week 05 2021

LatAmOil NEWS IN BRIEF LatAmOil

FINANCE stronger than before.” flow generation; Strong capital structure; Grow-
PetroTal is a publicly‐traded, dual‐quoted oil ing production profile; Regional importance,
PetroTal announces and gas development and production company noting Canacol is a key gas producer and sup-
domiciled in Calgary, Alberta, focused on the plier for the highly dependent Caribbean coast
successful $100mn issue development of oil assets in Peru. PetroTal’s flag- of Colombia.
ship asset is its 100% working interest in Bretaña
Canacol Energy, February 03 2021
of three year bonds oil field in Peru’s Block 95, where oil production
was initiated in June 2018, and in early 2020
PetroTal announces that it has successfully became the second largest crude oil producer in Rystad Energy: Argentina’s
completed the placement of a three-year $100 Peru. Vaca Muerta is now
million senior secured bond (as announced on Additionally, the Company has large explora-
January 12, 2021) with a fixed coupon of 12% tion prospects and is engaged in finding a part- producing at record levels
and a borrowing limit of $125mn. ner to drill the Osheki prospect in Block 107. The
PetroTal intends to use the net proceeds Company’s management team has significant The oil production decline that the COVID-19
from the Bond to repay all existing outstanding experience in developing and exploring for oil pandemic brought to Argentina’s Vaca Muerta
loans (in particular the restructured derivative in Northern Peru and is led by a Board of Direc- formation now seems like a distant memory.
liability with Petroperu, details of which were tors that is focused on safely and cost effectively The reserve’s oil output has not only rebounded
announced on January 19, 2021), to finance the developing the Bretaña oil field. to pre-pandemic levels but also reached a
continued development of the Bretaña oilfield, PetroTal, February 02 2021 record high of 124,000 barrels per day (bpd) in
to provide support for crude oil hedging transac- December 2020, a Rystad Energy report reveals.
tions, and to finance potential acquisitions. The ascent can continue towards the 145,000-
The Bond is expected to close on or about PERFORMANCE 150,000 bpd range by the end of 2021 if current
February 16, 2021, subject to customary closing activity levels continue.
conditions. Canacol Energy provides Vaca Muerta, meaning dead cow in Spanish,
Pareto Securities acted as sole bookrunner is holding shale gas and tight oil economically
and manager of the bond issue. update on gas sales and recoverable resources of global significance. The
Manuel Pablo Zuniga-Pflucker, President previous oil production record before Decem-
and Chief Executive Officer, commented: drilling programme ber was set in March 2020, when output reached
“PetroTal is pleased with the investor interest 123,000 bpd.
in this $100mn inaugural bond offering. This Canacol Energy is pleased to provide the fol- Contrary to oil production, Vaca Muerta’s gas
financing significantly enhances PetroTal’s lowing information concerning its January 2021 output kept declining through the fourth quarter
liquidity and will immediately lead to a return natural gas sales, drilling programme and credit due to lower seasonal consumption. Gross gas
to development activity at the Bretaña oil field, rating. production fell below 900mn cubic feet (25.5mn
with the next well expected to commence drill- Gas sales averaged 177 mcf (5.012 mcm) per cubic metres) per day in December for the first
ing by the end of Q1-2021. Additionally, the day for January 2021. Realised contractual natu- time since October 2018.
bond offering provides PetroTal with capital that ral gas sales (which are gas produced, delivered, “While well activity in the gas zone of Vaca
enables us to pursue synergistic and accretive and paid for) were 177 mcf (5.012 mcm) per day Muerta remained depressed in the final three
transactions to diversify the Company’s opera- for January 2021. months of last year, with literally zero gas wells
tions. As promised to our shareholders, all this Drilling Flauta 1 and Oboe 2: The Corpora- put on production, oil POPs rebounded sharply
will allow PetroTal to exit this pandemic crisis tion spud the Flauta 1 exploration well and the in November and December, pushing the new
Oboe 2 development well in January 2021. Both oil well count to an average of about 11 wells per
wells are targeting gas within the Cienega de Oro month,” says Artem Abramov, Head of Shale
(“CDO”) sandstone reservoir. Upon completion Research at Rystad Energy.
of the drilling and testing of the two wells, the YPF accounted for about 95% of Vaca Muerta
Corporation will mobilise the rigs to drill the shale’s oil production four years ago, with most
Cañahuate 4 development well and Siku 1 explo- volumes coming from Loma Campana, its joint
ration well, both targeting gas within the CDO venture area with Chevron. In the past four
sandstone reservoir. years, other producers such as Shell, Pan Amer-
Rating Agency Update:On January 19, 2020, ican, Vista, ExxonMobil and PlusPetrol have
Fitch Ratings affirmed Canacol’s Long-Term stepped up their activities in the oil window of
Foreign and Local Currency Issuer Default Rat- the play to gradually account for a larger share of
ings (IDRs) at BB-, and the Corporations senior the play’s volumes.
unsecured notes at BB-/RR4. The Rating Out- As of December 2020, YPF is yet to return to
look has been revised to Positive from Stable. its pre-COVID-19 Vaca Muerta oil production
The Fitch Ratings report noted the following record, and the play’s recovery was therefore
key rating drivers as factors for the rating and mainly driven by producers with aggressive cap-
outlook revision to Positive: Contracted reve- ital programmes planned for 2020. Specifically,
nues, noting Canacol’s long-term, take-or-pay Vista produced 15,000 bpd of oil and Shell fol-
contractual structure at fixed prices with strong lowed at 13,000 bpd in December, which should
credit quality off-takers significantly lowers the be viewed as new all-time highs from the basin
company’s business risk as this mitigates expo- for both operators.
sure to price and volumes risk; Predictable cash Rystad Energy, February 03 2021

Week 05 04•February•2021 www. NEWSBASE .com P15